The Marzetti Company · NASDAQ:MZTI
The Marzetti — Lancaster Colony — Stephens Investment Conference 2024
44 slides from The Marzetti's conference presentation, Nov 21, 2024
Slide 1: Stephens Investment Conference November 2024
Stephens Investment Conference November 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement p2 This presentation was prepared by Lancaster Colony Corporation for information purposes only and is not an offer or solicitation with respect to the purchase or sale of Company securities. We desire to take advantage of the “safe harbor” provisions of the Private Securities
Slide 3: About Lancaster Colony Corporation
About Lancaster Colony Corporation p3 • Manufacturer and Marketer of Specialty Food Products • Established in 1961 • Headquartered in Westerville, Ohio • Fiscal 2024 Net Sales of $1.9 Billion (primarily U.S.) • 14 Production Facilities in Seven States * • Approximately 3,800 Employees * Additional p
Slide 4: Company Highlights
Company Highlights p4 • Leading Market Share Positions in Retail Food Categories • Supplier to 18 of the Top 30 National Restaurant Chains • Growing and Consumer-Relevant Retail Licensing Program • Long History of Sustained Organic Sales Growth • Strong Cash Flows • One of 12 U.S. Companies to have
Slide 5: Long History of Sustained Growth
Long History of Sustained Growth p5 $ in Millions $2,000 11% Compound Annual Growth Rate a $1,500 2003 $1,000 2000 1997 $500 1989 1978 1969 1971 1980 1990 2000 2010 2024 Net sales information is presented as originally reported in Lancaster Colony's Annual Report for the fiscal years ending June 30.
Slide 6: Retail Sales Mix (53% of Total Net Sales)
Retail Sales Mix (53% of Total Net Sales) p6 Refrigerated * Dressings, Frozen Dips & Other * Breads 21.5% 35.5% Shelf-Stable Dressings, Sauces & Croutons 43.0% * * * * * * Based on reported net sales for the fiscal year ended June 30, 2024. * Products for these brands are produced and sold under exc
Slide 7: Foodservice Sales Mix (47% of Total Net Sales)
Foodservice Sales Mix (47% of Total Net Sales) p7 Branded & Other 21.6% National Accounts 78.4% QSR Customers Based on reported net sales for the fiscal year ended June 30, 2024.
Slide 8: Evolution of Our "Better Food Company" Strategy
Evolution of Our "Better Food Company" Strategy p8 1. Defined Winning - Pursue Top Quartile Financial Performance • Grow Organic Sales Volumes Low- to Mid-Single Digit (pounds shipped basis) • Grow Operating Margins 2. Developed Strategy • Strategic Growth Initiatives – Accelerate Base Business Grow
Slide 9: Retail Segment Growth Initiatives
Retail Segment Growth Initiatives p9 Initiative Brand Products Initial Ship Date Expanding Distribution NEW Into Club Channel Adding Honey Mustard and Zesty Buffalo Flavors to Core Lineup * Spring 2025 Chick-fil-A Refrigerated Dressings Licensing NEW Adding New Parmesan Caesar flavor Spring 2025 Int
Slide 10: Retail Segment Growth Initiatives
Retail Segment Growth Initiatives p10 Initiative Brand Products Initial Ship Date Texas Roadhouse Steak Sauces National Launch * March 2024 Licensing Texas Roadhouse Dinner Rolls Commenced National Launch September 2024 New Flavor Expansion * Balsamic NEW March 2024 Creamy Garlic February 2025 Glute
Slide 11: Consumer-Relevant Retail Licensing Program
Retail Segment Growth Initiatives p11 Consumer-Relevant Retail Licensing Program • Successfully developed exclusive licensing agreements through our proven culinary expertise and demonstrated sales execution in the retail channel combined with our strong reputation and longstanding relationships in
Slide 12: FY25 Supply Chain Path Forward
Strategic Growth Initiatives p12 FY25 Supply Chain Path Forward … • Maintain continuous supply across the entire supply chain • With successful implementation of new ERP system complete, shift to leveraging the system’s capabilities • With strategic manufacturing asset (Horse Cave dressing plant exp
Slide 13: Simplify Supply Chain and Reduce Costs
Strategic Growth Initiatives p13 Simplify Supply Chain and Reduce Costs Value Engineering (VE) to Help Offset Cost Inflation and Improve Profitability Identify opportunities to reduce product and VE Approach packaging costs that consumer doesn’t value • Lower-cost packaging materials • Alternative/s
Slide 14: Simplify Supply Chain and Reduce Costs: Strategic Procurement
Strategic Growth Initiatives p14 Simplify Supply Chain and Reduce Costs Strategic Procurement • Strategic Category Sourcing • Extensive Competitive Bidding • Optimize Contract Duration and Execution Timing • Extend Payment Terms
Slide 15: Significant Capacity Expansion Project for Sauces and Dressings
Strategic Growth Initiatives p15 Investing to Drive Efficiency and Support Growth Significant Capacity Expansion Project for Sauces and Dressings * * * * * * • Added 192,000 square feet to existing facility in Horse Cave, KY • Fully operational beginning in March 2023 • Provides increased processing
Slide 16: Pending Acquisition of Dressing and Sauce Production Facility
Strategic Growth Initiatives p16 Investing to Drive Efficiency and Support Growth Pending Acquisition of Dressing and Sauce Production Facility – Atlanta, GA • Strategic Addition to Our Manufacturing Network to Benefit Core Dressing and Sauce Operations • Supports Improved Operational Efficiency • A
Slide 17: Transportation and Warehousing Initiatives
Strategic Growth Initiatives p17 Simplify Supply Chain and Reduce Costs Transportation and Warehousing Initiatives Project T² • Continue to Leverage Transportation Management System • Utilize Carrier Segmentation and Lane Analysis to Ensure the Highest Level of Service at the Most Competitive Rate •
Slide 18: Culinary Excellence
Culinary Excellence p18 Our R&D Team is a Core Strength of Our Business … • Based at Our Innovation Center in Central Ohio, our R&D Team Brings Together the Best in Culinary Arts, Food Science and Technology • Supports Collaboration and Innovation Among our Foodservice and Retail Segments to Develop
Slide 19: Fiscal 2025 – First Quarter Financial Performance
Fiscal 2025 – First Quarter Financial Performance p19 $ in Millions Fiscal 2025 Q1 Results vs. Prior Year (Except Per Share Values) (Three Months Ended September 30, 2024) Value $ Change % Change Consolidated Net Sales $466.6 $5.0 1.1% Gross Profit $110.8 $2.1 1.9% SG&A $55.0 $3.0 5.8% Operating Inc
Slide 20: Strong Balance Sheet
Strong Balance Sheet p20 $ in Millions June 30 Sep 30 2022 2023 2024 2024 Cash and Equivalents $60 $88 $163 $135 Total Debt $0 $0 $0 $0 • Debt Free • Credit Revolver of $150 Million, Expandable up to $225 Million • Fiscal Years 2022 and 2023 Included Notable Investments in Capacity Expansion Project
Slide 21: Investing to Grow While Returning Cash to Shareholders
Investing to Grow While Returning Cash to Shareholders p21 Cash Priorities Fiscal 2024 – Major Cash Uses Project Ascent Share Repurchases $7.6 MM • Invest in Existing Business $8.2 MM - Fiscal 2025 capital expenditures estimated at $70 to $80 Million Regular Capital Dividend Expenditures Payments •
Slide 22: Supplemental Financial Information
Appendix A Supplemental Financial Information
Slide 23: Results of Consolidated Operations – Most Recent Fiscal Quarter
Results of Consolidated Operations – Most Recent Fiscal Quarter A1
Slide 24: Results of Consolidated Operations – Most Recent Fiscal Year Periods
Results of Consolidated Operations – Most Recent Fiscal Year Periods A2
Slide 25: Summarized Earnings Per Share Waterfall – Fiscal 2023 to Fiscal 2024
Summarized Earnings Per Share Waterfall – Fiscal 2023 to Fiscal Year 2024 A3 Fiscal Year Periods Ended June 30 (Diluted Earnings Per Share) $0.90 $5.76 $0.70 $0.61 $4.04 ($0.49) FY23 Exclude Impact of Cost to Exit Net Reduction Improved Business FY24 Reported FY23 Impairment Perimeter-of-the-Store I
Slide 26: Fiscal Year Net Sales Results
Fiscal 24 Sales Driven by Volume Gains Partially Offset by Deflationary Pricing in Foodservice A4 Fiscal 23 and 22 Sales Gains Driven by Pricing Actions Taken to Offset Inflationary Costs Fiscal Year Net Sales Results Fiscal Years Ended June 30 $ in Millions $1,872 $2,000 $1,823 +2.7% $1,676 +8.7% +
Slide 27: Fiscal Year EBITDA
Fiscal 24 and Fiscal 23 EBITDA Increases Driven by Reduced Expenditures for Project Ascent, Pricing Actions to Offset Inflation, and Cost Savings Programs A5 Fiscal 22 EBITDA Impacted by Inflationary Costs, Supply Chain Disruptions and Other COVID-19 Factors Fiscal Year Earnings Before Interest, Tax
Slide 28: Fiscal Year EBITDA Calculation Details
Fiscal Year EBITDA Calculation Details A6 Lancaster Colony Corporation * Calculation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) ($ in Millions) Fiscal Years Ending June 30, 2022 2023 2024 Income Before Income Taxes ** $112 $140 $198 Depreciation and Amortization $46 $
Slide 29: Capital Expenditure History
Capital Expenditure History A7 $ in Millions $132 $88 $90 $83 $71 $68 $27 $31 $18 $17 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Fiscal years ended June 30.
Slide 30: Regular Cash Dividends Per Share
Regular Cash Dividends Per Share A8 $ Per Share $3.55 $3.35 $3.15 $2.95 $2.75 $2.55 $2.35 $2.15 $1.96 $1.82 2015 2016* 2017 2018 2019 2020 2021 2022 2023 2024 Regular cash dividends for the fiscal years ended June 30. * Excludes special cash dividend of $5.00 per share paid in FY16.
Slide 31: Retail Brand Market Share and Related Information
Appendix B Retail Brand Market Share and Related Information
Slide 32: Portfolio of Strong Brands and Licensing Relationships
Portfolio of Strong Brands and Licensing Relationships (Retailer Sales and Market Share Data per Circana*) B1 Marzetti® Sister Schubert’s® Licensed Brands ^ Ref. Dressing** Dips $ Sales: 157.0MM Olive GardenSM $ Sales: 148.3MM $ Sales: 138.0MM $ Sales: 159.1MM $ Share: 78.3% $ Share: 56.2% $ Share:
Slide 33: Refrigerated Dressing Market Share
Refrigerated Dressing Market Share B2 All Others Marzetti * 18.6% & Chick-fil-A® 27.1% Bolthouse 11.1% Litehouse 24.8% Marie’s 18.4% Total Category Sales: $546.7 MM 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet *Chick-fil-A® sales accounted for $40 million, or a 7.4% dollar share
Slide 34: Marzetti Refrigerated Dressing Distribution
Marzetti Refrigerated Dressing Distribution B3 ACV Distribution 41 - 70% 71 - 90% Total U.S. Multi-Outlet 74.3% ACV Weighted Distribution 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 35: Produce Dip Market Share
Produce Dip Market Share B4 Marzetti 78.3% Litehouse 10.4% All Others 11.3% Total Category Sales: $176.2MM 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 36: Marzetti Dip Distribution
Marzetti Dip Distribution B5 ACV Distribution 21 - 80% 81 - 100% Total U.S. Multi-Outlet 73.9% ACV Weighted Distribution 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 37: Frozen Garlic Bread Market Share
Frozen Garlic Bread Market Share B6 Pepperidge Farm New York Bakery 8.0% 41.6% All Others 11.0% Private Label 39.4% Total Category Sales: $833.6 MM 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 38: New York Bakery Frozen Garlic Bread Distribution
New York Bakery Frozen Garlic Bread Distribution B7 ACV Distribution 70 - 89 90 - 100% Total U.S. Multi-Outlet 90.8% ACV Weighted Distribution 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 39: Frozen Roll Market Share
Frozen Roll Market Share B8 Private Label Sister Schubert’s 4.8% 56.2% All Others 6.5% Rhodes 32.5% Total Category Sales: $279.3 MM 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 40: Sister Schubert's Distribution
Sister Schubert's Distribution B9 ACV Distribution 21 - 40% 41 - 70% 71 - 100% Total U.S. Multi-Outlet 81.3% ACV Weighted Distribution 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 41: Crouton Market Share
Crouton Market Share B10 Marzetti, Cardini’s, Mrs. Cubbison’s / New York Bakery, Fresh Gourmet Chatham Village 17.9% 30.2% Private Label 43.8% All Others 2.7% Sugar Foods 5.4% Total Category Sales: $307.8 MM 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 42: New York Bakery Crouton Distribution
New York Bakery Crouton Distribution B11 ACV Distribution 69 - 100% Total U.S. Multi-Outlet 81.2% ACV Weighted Distribution 52 weeks ending 6/30/24, Source: Circana, Total U.S. Multi-Outlet
Slide 43: Lancaster Colony Is The Leader Amongst Our Peers In The Retail Channel
Lancaster Colony Is The Leader Amongst Our Peers In The Retail Channel B12 For Both Dollar Sales Growth and Unit Sales Growth Per Circana * Compound Annual Growth Rates - Calendar Year 2020 to 2023 Dollar Sales Sales Volume (lbs) Company 3-Yr CAGR 3-Yr CAGR LANCASTER COLONY 11.1% 4.1% Peer A 5.8% -4
Slide 44: Lancaster Colony Corporation contact
Lancaster Colony Corporation • 380 Polaris Parkway, Suite 400 • Westerville, Ohio 43082 www.lancastercolony.com NOV 24
Lancaster Colony — Stephens Investment Conference 2024 on 6ix